Credit Agricole CIB Research discusses its expectations for the inflation outlook in the US and Eurozone.
"Currently published data – commodity prices, PPI – and some technical effects suggest even higher inflation later this year: 5.5-6.0% in the US and 3.5-4.0% in the Eurozone. For 2022, we expect Eurozone inflation around 2% and 3.5% in the US on average," CACIB notes.
"Beyond 2022, there are five main reasons why inflation could return for good: 1. Inflation pushed by a prolonged, massive, broad-based fiscal stimulus 2. Self-sustained higher wages, on a global basis 3. A super-commodity cycle 4. Prolonged disruptions – multi-year – in the global supply chains 5. Massive costs from the energy transition (decarbonisation of the economy)," CACIB adds.